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Adapt or Die: Can digital save the high street?
Alarming statistics show that town centre shops closed at a rate of 18 per day in the first half of the year. This figure might seem encouraging when compared to a rate of 20 closures per day last year; however, it was betting shops and pawn brokers / cheque cashers that accounted for the marginal reduction in shop closures.
It is traditional retailers that are suffering worst of all as eCommerce purchases continue to increase exponentially. eCommerce accounted for 9.5% of the average £7bn spent on retail purchases each week in July, up from £6.7bn last July and £6.8bn in June 2013. During the four-week July 2013 sales period, £27.9bn was spent in total, 4.9% up on last July, and 1.4% up on the previous month.
Fluid Creativity attended a Cartology networking event on Wednesday evening, organised by www.manchesterdigital.com where Chris Hegg and Louis Georgiou from Code Computerlove provided some encouraging insight into the future of connected retail.
The focus was on how digital technology can alter the physical shopping journey, how it influences consumer behaviour and need and how this may become more accessible by leveraging devices and technology that are already available and in use.
For example, you and I use technology whilst in the physical retail environment, by checking prices against sites like Amazon against prices in store and in some instances choosing to buy online whilst in store. Retailers such as Marks and Spencer have ‘multimedia zones’ in their stores that combine digital discovery touch screens, video walls and displays of physical outfits to provide shoppers with inspiration.
It’s quite ironic that in some cases store have become nothing more than a product exhibit, with consumers trying on or ‘playing around’ with their desired goods before rushing to buy online where an exclusive ‘25%’ discount code applies. We see such examples on the high street daily, with H&M, Barratts and Dorothy Perkins currently rewarding customers with exclusive online offers and free delivery.
More innovative technology, which incorporates interactive and gestural interfaces, include the Sniff the Dog, a virtual canine which is rendered in real time and dynamically changes his behaviour based on video tracking data. The pavement in front of the shop window is illuminated with infrared lights and cameras which are used to monitor the passers-by and intelligently interact with them, recognising aggressive and passive movements and reacting accordingly –
Some may also remember the pioneering use of kinetic sculptures and interactive displays by Nike at the flagship Selfridges Central London store. In a window devoted to Nike’s Hyperdunk+ shoes, you stood on a street-side blue dot and jumped as high as you could. Then, the system asks if you’d like to save your score–you respond by touching a “yes” or “no” decal on the window, which makes the entire plate glass window feel like a touch screen (though really, the camera is just tracking the movement of your hand).
Clever use of technology, in particular to draw attention to shop windows, needn’t require the use of expensive technology, as demonstrated by this very basic, yet highly effective ‘aggressive sign’ commissioned for the Sherbrooke Media Art Biennial in Quebec and engineered by inventor Niklas Roy. This motorized sign was placed in an empty storefront window and sensed pedestrians on the sidewalk, trailing them as they passed the store, turning a boring sign which was unlikely to draw anyone’s attention into something which could not be missed and encouraged interaction.
There are many other examples – these were my own personal favourites. However, the question was posed – “what will affect more widespread adoption of digital?”
The answer, simply, is ‘Big Business’ – larger retailers invest heavily in and pioneer innovative use of digital, proving its effectiveness and then eventually that technology is picked up by smaller businesses.
In a recent presentation at the Goldman Sachs Global Retail Conference in New York, Walmart outlined a host of new initiatives in the area of business he described as “the convergence of the digital and physical retail worlds.”
Digital-physical convergence projects that have launched in the last 12 months include:
- Ship from store: today the volume of fast-moving items ordered from walmart.com that are shipped to customers from stores has only recently gone from the pilot phase to a broader rollout.
- Pay with cash: nothing unusual about paying with cash in stores, but it is unique to be able to do it for online orders.
- Lockers in stores: physical lockers are set up in stores so that customers can order online and then go the locker to pick up the order
- Scan and go mobile payment: self-checkout by a customer using a smartphone.
- Store-specific mobile app: an app that tells shoppers what specials are available in that specific store on that specific date.
- Same day delivery
eBay also announced a partnership this week with Argos where customers can collect purchases from selected Argos outlets. According to eBay’s president Devin Wenig, this will provide “seamless shopping experiences across all channels, this is a snippet of what will happen across the rest of the world.”
Retail veteran Bill Grimsey’s in-depth high street report ‘The Grimsey Review’ says that 20,000 businesses are at risk and that a new vision is required.
“The high street landscape has now irrevocably changed and there is no point clinging on to a sentimental vision of the past,” he says. “We have to start planning for a bold new world.”
Projections for online retail estimate sales to top 160,000 million EUROS by 2017. The retail industry has long been challenged when it comes to technological innovation. Historically, each retail function was managed in silos – security and loss prevention, workforce management, merchandising and store operations; each with its own systems, strategies and staff.
Technology has not only changed the way consumers shop, but has also changed the way retailers respond and how they operate. Retail needs to adapt or die when it comes to innovation and digital technology, so expect to see Sniff the Dog in a shop window near you in the coming future.